Executive Vice President Satoshi Ozawa said Toyota had recovered from last year's disaster-related supply shortages and was able to boost profits despite the disadvantage of a strong yen. A strong yen erodes the value of overseas earnings of Japanese exporters like Toyota.

"We have revised the forecast we announced at the end of the first quarter to reflect the progress we have been making," Ozawa said.

For the second quarter of the financial year, Toyota sold 2.2 million vehicles around the world, up from 1.8 million the same period the previous year.

Japan's top automaker raised its profit forecast for the full financial year through March 2013, to 780 billion yen ($9.8 billion) from 760 billion yen ($9.5 billion).

It had a profit of 283.5 billion yen the previous year, when Toyota production was hammered by the disasters in northeastern Japan and Thailand.

The company's optimism comes despite a sales plunge in China, where a territorial dispute over tiny islands known as Senkaku in Japan and Diaoyu in China has set off protests and a boycott of Japanese cars in recent months after Tokyo nationalised the islands.

It now expects to sell 8.75 million vehicles for the full financial year through March 31, 2013 - up by more than a million vehicles compared to the 7.35 million vehicles sold the previous financial year.

But the latest projection is 50,000 vehicles fewer than the 8.8 million vehicles Toyota projected in August.

Although Toyota lost 20 billion yen ($250 million) in operating profit from an unfavorable exchange rate, it gained 160 billion yen ($2 billion) through cost-reduction efforts during the latest quarter, it said.